If you’re carrying floating-rate debt, the rate lords at the Bank of Canada have just added to your interest burden. Here’s what the BoC just did and what it means to your wallet: Rate Decision: Canada’s key interest rate rose 25 bps today Prime Rate: Should climb to 3.95% within the week Market Rate Outlook: 3 more hikes by year-end 2019 (as of...
There’s still way too much inefficiency in the mortgage research process. That is, if we’re to believe the latest CMHC data. Three out of four homebuyers used websites to gather mortgage-related information, says Canada’s housing agency. But, among those, only 20% of first-time buyers, 24% of repeat buyers and 23% of renewers used “interest rate comparison” websites. It’s bad enough...
We’ve said it many times over. OSFI’s imposition of a stress test on borrowers switching lenders is potentially the most short-sighted government mortgage policy in Canadian history. See: “Mortgage Renewals Now More Costly — For Those Least Able to Pay“ The policy keeps borrowers—who have proven their ability to handle their mortgage—from switching lenders to reduce their interest bill. These...
Significant rate catalysts often come out of left field. Case in point: collapsing Canadian oil prices. Check out this chart below. It shows Canadian oil (a.k.a., Western Canada select, or “WCS“) rapidly cheapening versus higher-demand “WTI” oil from the U.S. This is a record discount. Its thickness, inferior quality and delivery challenges mean Canadian oil always trades at a discount to...
Fixed mortgage rates are rising all around us. The latest players to move are RBC, BMO and NBC. Each of them hiked fixed rates this morning. (The latest bank mortgage rates.) What they didn’t raise was the 5-year posted rate. That matters because big bank posted rates are used to qualify roughly 9 out of 10 mortgage borrowers in this country. They...
HELOCs have been getting a bad rap ever since the FCAC proclaimed in 2017 that “home equity lines of credit may put consumers at risk.” Bank of Canada Governor Stephen Poloz then followed soon after by including HELOCs in a speech about what keeps him up at night. Policy-makers’ concern is that HELOC rates are rising and people are using them...
The wait for good news on trade is over. The U.S. and Canada reached a last-minute deal on Sunday to replace the current North American Free Trade Agreement (NAFTA). And we’re seeing the rate effects already. Canada’s 5-year bond yield, which steers fixed mortgage rates, has rallied to a fresh seven-and-a-half-year high. The new deal, called the United States-Mexico-Canada Agreement (USMCA),...
“RBC’s affordability measure hasn’t been this bad since 1990.”—RBC Economics That’s according to RBC’s “Housing Trends and Affordability” report, which is making headlines across the country as we speak. But if you’re house hunting and terrified you won’t get a mortgage, don’t soil your trousers just yet. There’s a devil in RBC’s details. It’s the mortgage rates they assume in...
“You better be prepared to deal with rates 5% or higher. It’s a higher probability than most people think” —JP Morgan CEO, Jamie Dimon What if interest rates surged far higher and faster than you now envision? Picture this scenario for a moment: U.S. core price inflation above 3% for the first time since 1995 U.S. unemployment at 60-year lows...
Short-term rates are taking off. TD Canada Trust, one of the last big banks with cheap short-term rates, is a case in point. TD had the lowest one-year rates of any big lender for months. Today, it boosted its posted one-year rate by 30 basis points (that’s a lot in one increase), to 3.34%. The move comes as short-maturity government...
log in